The US embassy named the man as Warren Weinstein, who the police said was country director for US-based consultancy J.E. Austin, which works on development projects in frontline state in the war on al Qaeda.
He was snatched at dawn on Saturday in the wealthy neighbourhood of Model Town, just two days before he was due to return to the United States after five years.
There has been no claim of responsibility. Police in the neighbourhood told AFP that they had no idea who was behind the kidnapping.
Police official Tahir Mehmood described the kidnappers as young Urdu-speakers wearing Western-style shirts and trousers, based on witness testimony from one of Weinstein's guards. One of them had a beard, he added.
The guard said the kidnappers tied them up, removed the SIM cards from their mobile phones, and hit Weinstein in the head with a pistol to subdue him before taking away, police said.
"We have taken the mobile phones of the two security guards and are checking the call records," Mehmood said. "We are interrogating the security guards and doing a detailed background check on their past."
The large house has two gates and walls around six feet high, which could be climbed fairly easily, said an AFP reporter.
There are private security checkpoints in the street, which are typically unmanned during the day until night watchmen hired by the neighbours come on duty from dusk until dawn.
Few of the neighbours seemed to have any idea that Weinstein had been living there.
One man told AFP on condition of anonymity that he had only seen a foreigner in the street twice in six years.
"I thought it was some NGO office. Not many houses are given on rent in this area," he said.
Police said eight kidnappers forced their way into the house as the guards ate a traditional pre-dawn meal at 3:30 am (2230 GMT Friday) before beginning Ramadan fast.
Three men came to the front door offering food while five others climbed over the back wall, and they overpowered the guards before ordering Weinstein's driver to knock on his bedroom door and wake him up.
"My information is there is no clue yet," police official Jamshed Ahmed told AFP, deployed to guard the house with five others.
The US State Department says it is working with the authorities in the investigation.
Police said Weinstein had lived in Lahore since 2006, working for J.E. Austin Associates, which recently completed a development project in northwestern tribal belt.
Lahore is the capital of the eastern province of Punjab and considered one of Pakistan's more liberal cities.
Washington last Monday revised a travel warning, saying that Americans throughout Pakistan have been kidnapped for ransom or for personal reasons.
Copyright AFP (Agence France-Presse), 2011